LOW CORN PRICES GIVE ETHANOL BIGGER PRICE BOOST OVER OIL

Tricia Braid

Oct, 08, 2014  |  Today's News

While you’re out harvesting your portion of a record corn crop, ethanol continues to become cheaper relative to the price of oil. That’s a good thing IF we can get demand to grow as a result. However, arbitrary market barriers like the E10 blend wall are in the way. And proposed rules by the U.S. EPA aren’t helping, either.

Today at the CME, November ethanol futures were at $1.60 a gallon. RBOB gasoline was at $2.32 for the same month. Although it’s not the most generous price spread we’ve seen recently, ethanol’s still more than 70 cents cheaper than gasoline.

So how’s the ethanol industry reacting here at harvest? Here’s a look at some numbers provided by the Renewable Fuels Association.

Weekly ethanol production data for the week ending 10/03/2014:

According to US Energy Information Administration data, ethanol production averaged 901,000 barrels per day (b/d)—or 37.84 million gallons daily. That is up 20,000 b/d from the week before. The four-week average for ethanol production stood at 900,000 b/d for an annualized rate of 13.80 billion gallons.

Stocks of ethanol stood at 18.7 million barrels. That is a 0.9% decrease from last week.

Imports of ethanol were non-existent for the 10th straight week.

Gasoline demand for the week averaged 363.1 million gallons daily.

Expressed as a percentage of daily gasoline demand, daily ethanol production was 10.42%.

On the co-products side, ethanol producers were using 13.661 million bushels of corn to produce ethanol and 99,947 metric tons of livestock feed, 89,038 metric tons of which were distillers grains. The rest is comprised of corn gluten feed and corn gluten meal. Additionally, ethanol producers were providing 5.30 million pounds of corn distillers oil daily.